Financial Risk Management: Eliminate the Trade-Off of Speed & Accuracy

Recent innovations in high-performance computing enable risk calculations to run hundreds of times faster.

Anyone working in financial risk, whether at a bank, asset management firm, insurance company or other financial institution, knows risk calculations are complex as well as time- and resource-intensive. They involve computationally expensive instrument valuations across many scenarios requiring massive amounts of expensive compute resources.​

This fundamental challenge of complex and time-intensive risk calculations leads to many common problems faced by risk management professionals as they try to manage risk, satisfy regulators, and help the firm make timely, risk-aware decisions. ​

A significant issue is a constant trade-off between speed and accuracy. Even if there’s a need to use more scenarios or additional analysis runs, this is not always feasible. ​The unwieldy batch times of risk calculations can lead to many inefficient processes—traders without access to the most up-to-date information, or downstream systems and reports delayed or left incomplete while waiting for risk figures. Perhaps even more importantly in today’s volatile and fast-moving financial environment, long, intensive calculations result in a severe lack of business agility. ​Ultimately, this lack of agility negatively impacts the ability to proactively (and profitably) manage risk.

The challenge is particularly acute in counterparty credit risk management, where there are typically complex calculations over large numbers of scenarios and time steps. Another major challenge is X-Value Adjustment (XVA) desks and counterparty credit risk teams need to calculate in hundreds of timely XVA sensitivities to hedge properly and respond to sudden market moves.

SS&C Algorithmics has launched a revolutionary high-performance risk simulation engine that has been proven to run risk calculations hundreds of times faster than current processes.

The SS&C Algorithmics HiPER Risk Engine™ enables firms to transform financial risk management. Accelerated performance and efficiency enable risk departments to adapt quickly to new requirements, redeploy resources to value-added activities, drive operational efficiencies and respond in near real-time to market and business pressures.

The current release includes two key modules:

1. HiPER for XVA Sensitivities provides sophisticated and incredibly fast calculation of hundreds of XVA sensitivities. Banks can quickly recalculate in times of market stress to have up-to-date sensitivities for effective risk management and hedging.
2. HiPER for Counterparty Credit Risk gives highly accelerated simulations of common financial instruments, allowing firms to slash batch times or hardware, run intraday batches in near real-time, or massively increase accuracy with additional scenarios and analysis runs.

Contact us to learn more how you can benefit from the accelerated performance, greater efficiency and improved accuracy.